Risk Management
The identification, analysis, assessment, control and monitoring of risks, and in particular of risks that may jeopardize the company's existence, are core tasks of management. To this end, the organization's overarching objectives, strategies and policies for risk management must be defined. In addition to defining the methods for identifying and assessing risks, this includes determining risk-bearing capacity and appetite, defining responsibilities in relation to risk management, allocating resources to avert damage if a risk materializes, and communicating internally and externally about the identified risks (in particular reporting in the annual management report). In addition, the creation and maintenance of an appropriate risk culture in the company is also considered an important aspect of functioning risk management and should therefore not be underestimated. Appropriate risk management supports management in identifying risks at an early stage and counteracting them appropriately so that damage to the company can be averted.
Various (international) standards can serve as a basis for designing and also optimizing a risk management system in order to ensure its appropriateness. Risk management and the early risk detection system (especially for stock corporations) are based on the requirements of the German Control and Transparency Act (KonTraG) and the new version of IDW auditing standard PS 340 from 2020, which is based on this. According to this new version, the topics of risk-bearing capacity and risk aggregation in particular must be included in risk management.
Your risk management challenges
Our services in the area of risk management systems are particularly relevant for you in the following situations:
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Repeated occurrence of risks with, in some cases, considerable damage that could have been prevented if they had been identified at an early stage
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Outdated structures in risk management
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Capacity bottlenecks in operational implementation
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Own requirements or consideration of significant stakeholder requirements resulting in the need to establish a risk management system in principle
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Change of legal form, e.g. to an AG, or of shareholder structure (entry of private equity investors, IPO)
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Rapid company growth and thus also increasing risks that risks are neglected due to the momentum
Approaches to the challenges of risk management
Our services in the area of risk management systems include in particular:
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Design and implementation of risk management systems or individual components as part of optimization efforts,
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Review of your risk management system with regard to adequacy and effectiveness as well as compliance with regulatory requirements, e.g. to cover the new requirements from IDW PS 340 n.F. (in particular development of a risk-bearing capacity concept and implementation of risk aggregation),
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Structured identification of risks for your company based on proven techniques,
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Analysis and evaluation of identified risks with regard to their probability of occurrence and possible extent of damage on the basis of a uniform and systematic methodology, plus risk records to document all processes that take place in connection with risk analysis and assessment,
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Review your risk management system for compliance with ESG requirements, e.g. to map environmental risks and opportunities or TCFD requirements,
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Developing measures to manage or control risks, in particular to reduce the potential extent of damage and the probability of occurrence or to make their consequences manageable, and tracking the effective implementation of the measures,
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Design and implementation of risk monitoring measures using parameters that provide information about current risks (risk indicators),
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Optimization/updating of the existing risk management system
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Active operational support, for example in the evaluation and assessment of risks
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Support in the selection and implementation of relevant IT tools.
If you are interested and have any questions, please do not hesitate to contact us.
Your contact to us
Do you have any questions about our services or WTS Advisory? We look forward to your message or your call!
